1. Field of Invention
This invention relates generally to a method and system for a merchant credit card authorization system and, more particularly, to a method and system for providing an Authorization agent that communicates with the rightful owner of the credit card for its approval before completing the transaction.
2. Description of the Related Art
The convenience of credit cards makes it natural for consumers to use their credit cards to buy goods and services through the Internet. On-line stores recognizing the convenience of credit cards have adapted their web pages to accept credit cards as a means for conducting business with their customers through the Internet. The use of credit cards insures that the On-line stores/Merchants will be paid for the goods and/or services they provide to their consumers. The convenience of the credit card; however, comes at a price. This is because the anonymous nature of the Internet enables just about anyone with the credit card number and the expiration date to make unauthorized use of the credit card over the Internet. Moreover, the unauthorized user can be located anywhere in the world and use the credit card so that it is very difficult to prevent or detect the fraud.
Still further, another type of credit card fraud is the theft or cloning of the credit cards. For example, many merchants do not ask for identification when a credit card is used; and many automated systems, such as gas station pumps, allow anyone who posses the credit card to use it; such autonomy has led to fraudulent use of the credit cards at the expense of the merchants, credit card companies and consumers. In other words, current methods do not provide a means for checking that the user of the credit card is the rightful owner or someone who has been authorized to use the credit card. Although many On-line stores send a confirming email after a purchase, it is hardly a barrier to stopping fraudulent use of a credit card. One reason is that the unauthorized user can input any email address to send the confirmation, so that the owner of the credit card will never see it to do anything about it. Second, even if by chance the owner of the credit card did receive the confirmation email, it is after the fact and, therefore the fraud has already been committed. So anyone with the credit card number and the expiration date can log on to Priceline.com™ and Amazon.com™, and make fraudulent purchases without anyone knowing about it, until it is too late.
Some credit card companies have tried to deal with the above mention problems but not very well. For example, Citibank™ has instituted a program where a second credit card number is issued to a credit card holder. This number is tied to the consumer's credit account, but does not actually provide any fraud protection. Instead, the number is used to make purchases on the Internet just as the original credit card number. The consumer's Internet purchases are reported separate from his non-Internet purchases.
A similar approach is offered by American Express™, it pledges that, if someone other than the cardholder makes Internet purchases, the card hold will not be held responsible. Advertised under, “Blue” smarter credit card, this pledge is just that, a promise to the consumers that they will not be held responsible, provided the consumers were not negligent.
Visa™ offers parents the option of getting credit cards for their kids with a set limit that can not be exceeded. These cards then send email reports back to the parents of what the kids have purchased. A hard copy is also mailed at the end of each pay cycle. Again, like Citibank, this does not stop fraud.
Discover Card™ has instituted another reporting system using email. They send their cardholders a notice once their limit has been reached. A similar report is sent at the end of the billing cycle via regular postal mail.
Unfortunately, the above methods implemented by the credit card companies are inadequate to stop fraudulent use of the credit cards. Therefore, there still is a need to provide a method and system that can effectively prevent the fraudulent use of credit cards. Moreover, providing such protection with the convenience the credit card holders have enjoyed.
Another problem with the Internet is that it is not possible to determine whether an Internet user is lying about its identity on the Internet or not. Because the Internet user can be anonymous, there is great need for web sites to be able to confirm the sex and age of user.